Month End Close Checklist: Step-by-Step Guide + Free Checklist

This article discusses the month-end close process with flowcharts and checklists. Any business can benefit from automation of the monthly accounts close process. It will help it stay on top of its current situation as well as be ready for the future. Seeing that speed and accuracy are the most critical skills in the month end close process, we have created a free month end close template to streamline your team’s month-end projects. Rather than waiting until the end of the accounting period, consider continuously monitoring financial information and reconciling accounts throughout the month.

Failure to reconcile accounts and statements accurately

Simple math errors or the wrong keystroke in what is month end close process a single spreadsheet cell can have big consequences. Another great way to ward off errors and even fraud is to implement separation of duties in accounting. Recognizing revenue too early or too late can skew your financial statements.

Real Estate

For instance, utilizing software solutions for collecting financial data, reconciling accounts, and generating financial statements can lead to substantial time savings. These tools can rapidly compile and cross-reference data, identify discrepancies, and generate reports with precision. Next, record all revenue and expenses in the correct accounting period. A month-end close process tracks all your financial records accurately. Because of making balance sheet each month’s up-to-date financial reports, your annual closing process becomes more straightforward for the financial year.

Balance

Streamline your expense management, simplify expense reporting, and prevent fraud with Yokoy’s AI-driven expense management solution. Join 12’000+ finance professionals and get the latest insights on spend management and the transformation of finance directly in your inbox. Your job is to step back, assess the process from a bird’s eye view, and understand the big picture. It’s about finding the right tools for your business to simplify your life without sacrificing quality. You’re the scorekeeper of your business; you have to ensure the points are correct. Adhering to accounting standards and regulatory requirements is imperative.

• HighRadius’ Record to Report solution provides financial close automation, which offers project templates, close task management, and accounting anomaly detection.
• Financial Cents provides customizable workflow templates that allow you to document and standardize your month-end close procedures.
• This first step is crucial because it’s about setting your numbers straight.
• This basic month-end template was created by Tonya Schulte, Construction Accounting Specialist and CEO of The Profit Constructors.
• Implement a structured tax filing calendar that outlines deadlines for tax filing and other regulatory compliance activities.

Without proper documentation, the transaction could be misclassified, resulting in overstated expenses and Interior Design Bookkeeping understated profits.

What should your month-end reports contain?

You’ll need to include an analysis of your current month’s cash burn relative to budget, an outlook of your cash burn, and a sensitivity analysis on that outlook (among other things). Each month, I include commentary on accounts with significant MoM changes or material Budget to Actual differences (and the reasoning). Automating parts of your month-end close can significantly reduce manual labor and errors. Efficiency in other financial processes directly impacts the ease of your month-end close. Reconcile your payroll account with the payroll register, including bonuses, commissions, and benefits. Verify correct posting of payroll entries and payment of necessary taxes and deductions.

You can also leverage Brex’s direct integrations with top ERPs like NetSuite to enable two-day data syncing, eliminating the need for manual imports and exports. With a comprehensive month-end close checklist and powerful accounting automation to drive accuracy, you’re well on your way to a smoother monthly close. The first step in your month-end close checklist is to ensure all transactions are properly recorded and supported by appropriate documentation. Think sales invoices, expense receipts, payroll records, and bank statements. On the other hand, a streamlined process can ensure the close goes smoothly, helping accounting teams collaborate effectively and saving time. The month-end close can present challenges for accounting teams, as we just saw, but these are not insurmountable.

Steps to Complete the Month End Close Process

Some small business owners underestimate the importance of the month end close process. They may not see how tracking what happened during the previous month helps them set a company up for success in the future. The petty cash fund accounts for tiny purchases that are so easy to overlook. Develop workflows that allow for automatic processing and recording of petty cash transactions. For example, your year end close becomes a lot simpler if you have accurate monthly reports to work from.